The strength of the Yen is forcing many Japanese automakers to consider building cars for export markets outside their home country. Honda is no different, and has confirmed that it will build the Fit hatchback at its new plant in Mexico starting in the spring of 2014.

The plant in Mexico is not the only location where Honda will build the Fit, but it will be used to supply the small hatchback to the large United States, Mexican and Canadian markets. Honda expects to build up to 200,000 subcompact vehicles per year at its plant near Celaya, Guanajuato.

Honda already builds a huge number of vehicles in North America. In fact, as pointed out in the press release after the break, more than 85 percent of the Honda and Acura models sold in America were built in the United States, Canada or Mexico. What's more, the addition of the Fit to the Accord, Civic, and CR-V means that all four of Honda's global nameplates will be produced in North America.

03/28/2012 - CELAYA, Mexico
Honda de Mexico, S.A. de C.V. (HDM) laid the foundation stone for the construction of its new vehicle production plant in Celaya, Guanajuato at an event attended by Felipe Calderon Hinojosa, president of Mexico and Takanobu Ito, president & CEO of Honda Motor Co., Ltd. The plant will begin operation in 2014 with production of the Honda Fit subcompact model.

With this new facility in Mexico, Honda continues to advance its commitment to invest and grow its operations in North America. With growing demand for fuel-efficient vehicles, the new plant will increase Honda's ability to meet customer needs for subcompact vehicles from within North America.

Expected to employ approximately 3,200 associates at its full annual capacity of 200,000 units, the new Honda de Mexico plant in Celaya will produce the Honda Fit subcompact model both for the Mexican market and for the U.S. and Canadian markets, as well as other regions.

"Considering the needs of the Mexican market, which is expecting continued growth in the future, and also serving as a global production base for the North American region and beyond, we decided to make the Fit the first product to be produced here," Ito said.

Also, we will create a highly efficient production system that allows us to provide high quality products at an affordable price both by expanding the use of local parts and by utilizing global parts sourcing," he said.

The new plant will occupy 5.66 million-square meters near Celaya, Guanajuato, about 210 miles east of two existing HDM plants in El Salto, Jalisco, which build automobiles, motorcycles and auto parts.

The Celaya plant will apply Honda's advanced and highly efficient manufacturing system to produce both vehicles and engines. The new Honda plant will be the company's eighth auto plant – and its 10th auto assembly line – in North America. The new plant will boost Honda's capital investment in its North American operations to nearly US$21 billion.

Honda employs more than 33,000 associates in North America. Production operations related to automobiles include four auto plants, two auto engine production facilities and two transmission plants in the United States. In addition, Honda has two auto plants and an auto engine plant in Canada, and an auto plant in El Salto.

The new plant in Mexico will increase Honda's automobile production capacity in North America from 1.63 million units to 1.87 million in spring 2014. In 2011, more than 85 percent of the Honda and Acura cars and light trucks sold in the U.S. were produced in North America. In addition to region-specific models, including the Honda Odyssey, Pilot and Ridgeline, and the Acura TL, MDX and RDX, Honda produces key global models such as the Honda Civic, Accord and CR-V in North America. The addition of Fit production in Mexico means Honda will produce all four of its global models in North America.

Emphasizing Honda's commitment to environmental responsibility, 13 of Honda's 14 North American manufacturing plants operating in North America meet the ISO 14001 international environmental management standard.

About Honda De Mexico
HDM was established in September 1985, and began sales of motorcycle products in 1987. In March 1988, HDM started production of motorcycle products and automobile service parts in El Salto, Jalisco. An adjacent auto production plant opened in 1995 with production of the Honda Accord, switching to production of the Honda CR-V in 2007. HDM's current annual auto production capacity is 60,000 units.

About Honda in North America
Based on Honda's longstanding commitment to "build products close to the customer" Honda currently operates 14 manufacturing facilities in North America, producing a wide range of Honda and Acura automobiles, automobile engines and automatic transmissions, Honda all-terrain vehicles, and Honda power equipment products such as lawn mowers, mini-tillers and general purpose engines, using domestic and globally sourced parts.
Honda started local production in the U.S. with motorcycles in 1979. In 1982, Honda became the first Japanese automaker to produce passenger cars in the U.S. Honda has continued to expand its local production capabilities, and cumulative automobile production in North America surpassed 23 million units in 2011.

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"Accord" may be a global nameplate, butt the US-built Accord is the Honda Inspire in other markets.
By 2014, the Fit should be in it's next generation, which makes a more logical point to start production in Mexico--why bother to install stamping dies for a model about to be replaced?.

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Not that I have any qualm about men and women being employed in Mexico, but if GM can build the Sonic in Michigan and sell it for cheaper than a similarly optioned Fit then why can't Honda- which doesn't even have to pay union wages- produce this car in the US or Canada? I guess at this price point you should sort of expect it but if they're going to pay their plant workers the kind of wages that prevail in a country like Mexico then the car's price should at least reflect that.

It remains to be seen if the Sonic is a profitable vehicle with such high labor costs. There is not a lot of margin to play with, and it wouldn't be above GM to lose money on each car just to keep the Union peace as well as meet CAFE standards for the rest of their truck-heavy offerings. The FIT will also be sold in Mexico and likely other South American countries, where they will sell for much less than in the US, so they really need to keep the costs at an absolute minimum (which is why VW is building their plant there), meaning no production of this car in the US. Most manufacturers still import their cheapest vehicle to the US for that very reason, they simply cannot make money on them here.

Well that does make the decision more sensible. But like I said, the main issue isn't that Honda is opening a factory in Mexico- it's that despite taking advantage of their low labor costs the Fit is still likely to be one of the most expensive B-segment cars on the market.

So the car will be using the same construction materials, and have the same warranty. As a customer, exactly how does where it was all bolted together matter?
This isn't exactly a race car.
On the other side of the coin, you can be rest assured that the production cost savings won't be passed along to you at all.

Funny reading the comments about VW quality in Mexico, or the Chrysler quality in Mexico. VW quality when they were built in Penn was so bad, the factory disappeared. Chrysler products are crappy no matter what country they are built in.

So long as the quality doesn't go all VAG with the location change, which if the quality control is up to par with the rest of Honda's plants it shouldn't, then this ought to be a good thing for future Fit owners. Hopefully it'll lower the pricetag of this overpriced B-segment winner a decent amount.

When was the last you ever heard of Honda lowering their prices??? They will probably save a nice chunk of change, what with the cheap, unskilled, non-union labor down there, but there is NO WAY that those savings will ever be passed on to consumers. Say adios to the Fits high quality. Pay more, get less - this is NOT a good thing at all...